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Balboa Break Up

The sale of the Balboa Bay Club and Resort and the Newport Beach Country Club to a wealthy Chinese investor has been called off, according to sources familiar with the transaction.

International Bay Club Inc.—a Newport Beach-based company that owns the tony oceanfront yacht club and the nearby golf club—has terminated a deal to sell itself to Seven-One Capital Business Inc., an entity headed up by Chinese-based energy and transportation entrepreneur Winston Chung, according to sources.

The sale apparently fell apart over Chung’s inability to provide the funds for closing the deal.

Difficulty getting money out of China—a common refrain among potential Chinese investors in U.S. properties and businesses these days—appears to have been the downfall of the deal. China’s government has tightened up the amount of money that investors can shift out of the country as it seeks to prevent capital outflows amid concerns over its domestic economy and the stability of its currency.

A source close to the Balboa Bay Club said the ripple effect scuttled the deal with Chung.

“The Chinese Central Government had not allowed the movement of the necessary funds,” the source said.

Chung’s representatives in the U.S. could not be reached for comment.

A sale of the posh Orange County clubs could still move forward with other bidders. A time frame for any new deal and any potential buyers remain unidentified.

Other sources not directly involved in the transaction said there is serious interest from other potential buyers if International Bay Club goes back on the market.

The deal with Chung was struck in August, and was initially expected to close within a month.

Terms of the sale were not disclosed at the time. Industry sources have put an estimated price tag on the sale of the two properties in the $170 million range.

Rooms, Apartments

The Balboa Bay Club, located along the Mariner’s Mile section of West Coast Highway, counts about 160 hotel rooms, along with 145 high-end apartments and a 144-slip private yacht marina. The club got a $65 million renovation in 2003.

The Newport Beach Country Club, site of the Toshiba Senior Classic golf tournament, is a few miles away, next to Newport Center and Fashion Island.

International Bay Club is looking to nearly double the size of the clubhouse at the 18-hole golf club to about 51,000 square feet, among other upgrades.

The deal for the two properties was believed to have included a substantial, non-refundable down payment made by Chung.

The August announcement of the sale raised plenty of eyebrows in OC real estate and social circles, due to the two properties’ prominence among the area’s rich and famous, Chung’s involvement and the expected high price tag.

The deal had been the most prominent Southern California real estate acquisition announced by Chung, an electric-battery magnate and philanthropist with a quirky biography. Over the past year or so, he has announced plans to invest hundreds of millions of dollars in area businesses.

His biggest plans besides the two clubs call for building an electric battery factory somewhere in Southern California that could employ 2,600 workers.

Busy Past

It’s unknown whether trouble getting money out of China will hinder Chung in his other local ventures.

Chung has already made good on a number of other area deals, buying stakes in several Southern California companies with the potential to tie into his electric battery operations.

He has closed on a $24 million investment in Fountain Valley-based Gaffoglio Family Metalcrafters Inc., which makes prototypes and designs for large automakers.

Chung also has put $28 million into Krystal Koach Inc. in Brea, one of the country’s largest limousine makers, and several related businesses.

He’s also been a benefactor, giving $10 million to the engineering school at the University of California, Riverside.

Other Deals

Among other real estate transactions that are still up in the air, Chung was also rumored in the summer to be in for a Newport Harbor mansion once valued at nearly $35 million. That deal hasn’t closed.

International Bay Club is privately held. It’s owned by Beverly Ray Parkhurst, whose former husband, William Ray, bought the Balboa Bay Club nearly 40 years ago and followed up with the Newport Beach Country Club in 1985.

William Ray died in 1991.

The nixed deal with Chung’s business is the second time a proposed sale of International Bay Club is known to have fallen through.

The company was last put up for sale about 12 years ago for a reported $74 million in a deal that was never completed.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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